Successful family-owned businesses and especially those that have multi-generations of family members working together in a family understand it’s NOT the decisions they make together, the values they choose together, and the accomplishments they make together…that carry the most weight.

As one of my favorite client's like to say, "The food tastes so much better when everyone helps make it.".

True.

The skills and experience gained while working together… as family members and business colleagues…create far more value to you and your family members. The process and experience are enhanced when you all seek answers together, talk together, learn together, struggle together, get to know one another better, grow more tolerant of one another and learn how to come to agreement as a group. These are the kinds of things that happen when you engage in such processes as developing policies, doing collaborative planning or simply enjoying a family reunion.

​Because process is so important, successful families sometimes make the assumption that whatever policies or statements they create today can be changed three years or five years or a generation from now. Some families believe that policies should have sunset clauses, perhaps extinguishing them every generation. They tell the next generation, sometimes in a preamble, “These policies are important to us and work for us, but if you just embrace them as they are, you will miss the most important part: going through the process of creating your own.”

Last week we began explore another area of your family farm business management system as you begin the succession planning process and plan for a successful generational transfer of responsibility, management and ownership of your family business.

The absolute joy of developing policies for your family farm business.

Policies - Oh Joy!

Let’s continue down the path of developing and fine-tuning your family farm management system – for clarity, consistency and hopefully improved relationships and financial performance. Just as written job descriptions and areas of responsibility and accountability are essential for providing clarity and expectations for team members, there are other areas in your family farm business where clarity is also essential -- Clearly defined and communicated policies and procedures.

Job descriptions serve many functions and if this is new information for you…great! If you’ve heard it before and never really implemented anything…well, shame on you. Just kidding. Seriously, this is all about continuous improvement. So, back to job descriptions.

In our practice, the unofficial statistics reveal that less than half of our most modern agricultural producers have adopted this as part of their management practices. How can this be? After working with many family farm clients in this area we learned that a common roadblock was that they did not completely understand the need for job descriptions or how to go about implementing the idea. Secondarily, we have also heard feedback that formalized job descriptions were more for non-family business employees and staff. Let’s examine further…shall we? Job descriptions help in daily operations as well as succession planning in a few key ways.

Identifying responsibility and accountability for specific performance standards or decision-making for each member of your family business team is a key benefit.

Job descriptions help management determine whether there is an actual need when contemplating bringing someone into the business, specifically a family member, but it applies to everyone. Instead of the traditional mindset that mirrors, “Hey, I’m family and I deserve a job.”, by matching specific duties with specific and required skill sets, that someone may or may not possess, this becomes the basis for adding or replacing staff. This is a much more effective way at managing your team…and your profits.

Performance appraisals and reviews are sometimes also lacking in a family business. The sometimes awkward situation is eliminated when everyone is clear on what is expected. No surprises. Sure, it’s family…but it’s still a business.

Job descriptions and designated areas of responsibility aid in succession planning by helping provide guidelines for what skills are needed so that the senior generation can “step-aside” for future management. The gaps that exist between the job description, job performance, skill sets and decision-making capabilities of the successor generation and those of the senior generation become the basis for personal development plans and training for the successor generation. It helps spell out what the successor generation needs to learn before being offered the opportunity to manage the entire operation. It also helps develop a timeline for management transition for clarity and understanding by everyone involved.

So, the need for job descriptions for your family farm have been clearly stated. Now what? A seemingly difficult, but fairly simple task is to begin by documenting the various tasks and decision-making areas of your family business. There are now two key tasks to perform and listed in the order of importance below…

What qualifications and skills are needed for each task/decision?

Who performs these tasks now and in the future?

You need a process for filling the gaps between the skills possessed by your team and the skills needed for the future.

Oftentimes, the least qualified person on the team is doing something they shouldn’t be, or is tasked with something that they really don’t have the skills to perform. This happens for many different reasons. By determining the qualifications and skills needed for the task ahead of time, it becomes less personal and more objective to assess who should perform what role in your family farm business. Regardless of a transition plan or not, this exercise might help rearrange your team members to perform different roles that they are more qualified to perform. You and your team might become more effective and happier.

This exercise also helps show where gaps may exist. Oftentimes, no one is qualified to perform a certain task or area of decision making. So, it needs to be outsourced, filled internally or someone needs to get the training necessary to fill that role. As mentioned above, when looking toward the future and the “stepping aside” by senior management and the “stepping up” by a successor generation, presumably there are differences between the decision-making skills and areas of responsibility between the two generations, with the senior generation having much more responsibility and decision-making authority, along with the associated skills to do so. The gap between the roles each performs today and what you have determined needs to be performed in the future becomes your management transition plan.

For example, Uncle Joe and Dad make any land purchase decisions. When Dad and Uncle Joe retire in 10 years, Billy and Susie are going to need to make those decisions. What skills do Dad and Uncle Joe possess today that enable them to make good land purchase decisions (presumably) that Billy and Susie will need to learn to make good decisions in the future? How are they going to learn them? Do they want to learn them? If not, who can they get to fill that role in the future? Does that make sense? Now, carry that line of thinking to all the roles and decision-making areas of the business.

It’s just a matter of taking the time to determine the roles, gaps and timelines for gaining the necessary skills for continued success of your family business. To best accomplish this, honest self-assessments, performance reviews, natural strengths and weaknesses and a system for helping flush this all out builds the basis for continuity in operations and accomplishes a formidable task of any succession planning. As you might imagine, we have some various forms and detailed exercise to help you with this specific task. If you’d like a copy, please email me and we can get out to you right away.

While a lot of this “communication” stuff might sound like some touchy feely, sing koombaya, hug each other until it hurts baloney that you might find better suited for a therapist’s couch, it is indeed important. MOST problems in family owned businesses can be traced back to a direct result of either poor management practices and/or unprofessional communication practices. At least that has been our experience.

Maybe your family business has been able to beat the odds and there are no hidden agendas, alligators in the closet, jealousies or misunderstandings. Heh. Your investment in improving these areas of your business is MORE IMPORTANT than saving ¼ percent on your line of credit, or which combine gets overhauled this winter. Without a professional communications platform for your family farm, business stagnation, paralysis and breakup are often the ultimate outcome.

A few areas you might consider addressing in your family farm business are guidelines for meetings and personal accountability standards for you and your teammates. Discussing and developing the reasons and types of meetings you will hold can help end the sometimes useless meetings that can creep into your business.

The practice of Personal Accountability has several components as its foundation. One key component is the notion that each individual person on your team’s personal behavior adheres to the “It is My Mess. I Own It. It is Up to Me to Change It.” mindset. When interacting with others this involves asking questions in a different way. For example, asking “How” and “What” questions as compared to asking “Who”, “Why” and “When” questions.

“Why” questions invoke the notion that people have no control over their circumstances or environment. While sometimes this is true, you can always change your environment by changing your location…or mindset. “Why” questions invoke victimhood and “oh poor me” thinking. Like it’s one big pity party. This is not good.

“When” questions suggest someone else might be responsible and that all you can do it wait for something better…a form of procrastination. “When is management going to do this?” or “When will Billy do what he promised?”, etc. This is not good.

“Who” questions suggest that someone else is to blame. It’s the Blame Game. “Who made that decision?”. “Who is going to fix this?”, etc. This is not good.

“How” questions are a search for a solution. “How can we make better decisions?”. “How can I help you?”. “How are we going to fix this?”. This is good.

“What” questions seek answers. “What can be done?”. “What is the lesson to learn from this mistake?” “What is the solution?”. This is good.

Personal Accountability is all about being ready to answer the questions:

“How can you improve or change this situation?” and “What are you willing or able to do?”

By focusing on the situation, issue, opportunity or problem…and NOT other people… creativity, productivity and more harmonious relationships can develop.

An article about meetings? SHOOT. ME. NOW.

I know. I know. You have all been there. Some meetings just drain your energy! Meetings are perceived as one of the biggest wastes of time. For way too many companies…they are! However, if done properly, they can be a very effective tool used to simplify communication, coordination and decision-making on areas that involve more than one person

Of the many reasons why meetings are so energy-sucking is because the meetings have limited structure, there are not clearly defined areas of responsibility or standard practices for performing routine activities. Not every decision to be made requires a committee, nor attended by everyone in the business. To become more effective with your family business’s meeting structure, answering the who, what, when, why and where can be very simple to execute:

• How many and what types of meetings are applicable to your family farm?• Who should attend and participate in the various meetings?• What items are appropriate for any given meeting?• When and where will meetings take place?• Why are we having this meeting and what are the expected outcomes?

"Meetings get a bad rap, and deservedly so...most are disorganized and distracted. But they can be a critical tool for getting your team on the same page."

- Justin Rosenstein

Agenda setting is a key to making sure that meetings remain focused on the appropriate topics for those attending. Before moving along, it is prudent to talk about who sets the agenda. If you have adopted the practice of defining roles and responsibilities inside your business, this is another to add to someone’s job description. So, let’s assume that the agendas for the various types of meetings in your business will be the responsibility of a designated person…a meeting planner. The meeting planner has the task of recognizing that inside almost every business there are employees, managers and owners. Agenda items need to be relevant to those attending in their various capacities (staff, manager, owner).

Staff meetings are generally intended to discuss tactics and day-to-day business activities. These will vary in frequency. On the family farm, there is often a need for short, quick daily “stand-up” meetings to discuss immediate needs and planning. Daily “Stand-Up” meetings are just that…standing. Don’t sit down. The goal is to make it quick, efficient and productive. Weekly meetings may be more appropriate during slower times and can be used for outlining goals for the week and assigning activities. Ad-hoc meetings can be called for training and internal announcement type information.

Management meetings are intended to explore bigger picture issues like planning, defining job responsibilities, coordination of resources, deciding on priorities, determining how to gather and analyze data and employee reviews and training programs. These meetings can be weekly, monthly, quarterly and annually. It depends on the agenda and the desired outcome of the meeting.

Ownership and board meetings should be conducted at least annually and involve key stakeholders, owners and spouses. Many times, there is a need for these to take place quarterly and monthly, especially as your family business becomes more complex. Whether they are involved in day-to-day activities or not, spouses are a big part of ownership meetings for family businesses. They act as silent partner in the business by virtue of being married to an owner. These meetings are appropriate for strategic planning issues, general policy setting for operations, dividend distribution and management compensation.

There are several reasons for having a meeting. The expected outcomes from various agenda items fall into one of three categories: 1) Give information, 2) Get information, or 3) Develop options or make decisions. These need to be clear when agendas are shared with attendees. If attendees are not clear, some may be trying to make a decision while others are simply sharing information. Does that make sense?

Some best practices for helping ensure productive meetings include trying to make sure that attendees have balanced participation. Locate the meeting where business can be conducted without interruption, including cell phone usage during the meeting! Whoops, I let that pet-peeve out of the box. Toddlers should not be present and the TV should be turned off. Holding meetings at the kitchen table is not the best practice and is conducive to interruptions and perceptions of low seriousness. Location is important. Rotating locations can add some variety and helps level the “home turf” advantages that can subconsciously creep into the situation. Schedule meetings when they are appropriate. Don’t schedule a 4 hour long-term planning session during the middle of harvest.

Keeping meeting notes and using them as a basis for follow-up helps eliminate those decisions that are sometimes made where no one ever gets busy with the specific action items. Meeting notes also help create an environment of personal accountability. If everyone knows that there will be follow-up, odds increase that the work will actually get performed. You may have experienced it – everyone is excited about an idea, but it never gets implemented because the “who”, “what” and “when” of the idea were never decided upon. Several months later, the same discussion often takes place again…a complete waste of time.

General Rules for Business Meetings and Guidelines for Personal Accountability can provide serious productivity and accomplishment to various meetings in your business. Coming to an agreement on these things before holding meetings is a best practice and something we can explore in the near future.